CMBG3 Law previously reported on an August 18, 2017 ruling by the Fifth Circuit appellate court, in which the court held that excess insurer U.S. Fire Insurance was not required to pay $2.5 million to primary carrier Trinity Lloyd’s Insurance Co. (“Trinity”) to cover defense costs of a defendant in the asbestos litigation. The ruling was based on a finding that a pollution exclusion existed in the insurance policies. Last week, Trinity filed a Motion To Reconsider, asking the Fifth Circuit to re-examine the policies and their initial ruling. 

More specifically, Trinity argued that the appellate court used a far too overbroad definition of “pollutant” when it examined the language of the existing insurance policies and found that a pollution exclusion existed. Trinity’s argument centers on the appellate court’s finding that caselaw “slightly favors” treating asbestos as a pollutant. Trinity, however, argues that the court failed to apply Texas rules by construing the exclusion in favor of the insurer and that the interpretation by the court of the exclusion language was so broad that it was rendered meaningless. 

The appellate court’s ruling is the latest in litigation over the existing policies, which saw the lower court issue rulings on key issues to those monitoring the insurance rulings nationwide, including rulings on vertical versus horizontal exhaustion, the “trigger” of coverage for the asbestos claims, and whether the pollution exclusion applied for purposes of excess coverage. 

CMBG3 Law’s attorneys have worked with national and international insurance companies and insureds on a wide variety of coverage issues in state and federal courts over the years. If you have any questions or would like more information, please contact John Gardella (email him or 617-936-4353).